Coming Soon to an Xbox Near You
Microsoft and Netflix Team Up to Stream Films, TV Shows

By Mike Musgrove
Washington Post Staff Writer
Tuesday, July 15, 2008

Xbox owners will soon be able to watch movies streamed through game consoles to their TVs, thanks to a deal Microsoft landed with online rental service Netflix.

The announcement was made yesterday at a Microsoft news conference given on the eve of the E3 Media and Business Summit, a major video game industry trade show in Los Angeles.

Microsoft is not the only consolemaker seeking to bolster its hardware's presence in the living room by offering film and TV content. Sony has announced that its store for buying and renting movies and other video content on the PlayStation 3 should go online this summer.

Netflix subscribers have been able to watch some titles in the company's library at their computers since last year, and a relatively new, Netflix-compatible device by gadgetmaker Roku allows subscribers to watch those streams on their TV sets. The online DVD-rental company, based in Los Gatos, Calif., offers about 10,000 titles online; it has not secured the rights to stream all of the 100,000-plus movies and TV shows in its library.

The Xbox service, which Microsoft says will be up by late fall, should greatly expand the video offerings for Xbox users. Though Xbox 360 owners have long been able to download content from Microsoft's video store, critics have sometimes complained that the selection is too limited.

Microsoft vice president of interactive entertainment John Schappert said yesterday that Xbox-owning Netflix users will not have to pay extra subscription fees for the service. Netflix has 8.2 million subscribers; about 12 million Xbox owners use Microsoft's online service for the console.

"It's an important step for Microsoft as it starts to try and reach beyond the hard-core gamers of the family," said Michael Gartenberg, analyst with JupiterResearch. "This gives the nongamers one more reason to want to use the Xbox."

A recent report by research firm NPD Group showed that Sony sold more units of the PlayStation 3 in the first five months of 2008 than Microsoft sold units of the Xbox 360. Previously, the PlayStation 3 had regularly trailed the Xbox 360.

Sales of both consoles still lag behind Nintendo's Wii, which does not offer a video store for its device.